Spain reduced the VAT on ebooks - Page 2

LARdT · 12-16-2009, 05:07 AM

As a spaniard I comment the news on my blog http://mipapyreebookreader.blogspot....algo-util.html

The facts: publishers asked for it because digital books make 8% volume for publishing industry, which is quite strong because of Hispanic America trade.
The legal trick is made by applying the priviledged VAT rate of 4% for "cultural goods". The "digital book" is treated as "book" instead of beign treated as "digital". That makes a 12% discount difference from the universal rate of 16%.

"Underground" commentators say that the ministry of culture, Gonzalez-Sinde, former movie director, has done this in order to be more popular with the websphere, which has been very active against her because her opposition to P2P, SGAE copyright protection taxes, and other non popular measures.
She was called "SINDEscargas" (a joke with her family name meaning "No downloads")

Terisa de morgan · 12-16-2009, 05:12 AM

Quote:

Originally Posted by HarryT

I'm not sure what you mean when you say "it looks good for publishers". Nobody makes any "profit" out of VAT - you just collect it from your customers, and pay it to the government. The VAT rate affects the price that people pay for your product, but it doesn't affect in the slightest the amount of money that the seller ends up with.

Perhaps in an ideal world. And I've explained bad sorry, better for retailers. My doubt: is the retailer going to decrease the price according to the VAT decrease? or is the retailer going to maintain the price and obtain more profits? I've to see it.

LARdT · 12-16-2009, 05:31 AM

Well, they count on the increase of sales derived from lower prices.
Retailers usually sell books for prices imposed by the publisher.

But you are right to point that prices are "completely elastic" to VAT in case of increase, but can be a little "inelastic" in case of decrease; meaning that usually 1% up VAT means at least 1% up in prices to the final consumer; and -1% VAT sometimes means 0% difference in final price.

Terisa de morgan · 12-16-2009, 05:39 AM

Quote:

Originally Posted by LARdT

Well, they count on the increase of sales derived from lower prices.
Retailers usually sell books for prices imposed by the publisher.

In Spain, I'm afraid always is the same price. "Fixed price book law", but I don't know who fixes the price.

Sweetpea · 12-16-2009, 06:23 AM

Quote:

Originally Posted by Terisa de morgan

In Spain, I'm afraid always is the same price. "Fixed price book law", but I don't know who fixes the price.

Here (the Netherlands), the publisher decides upon a fixed price for books and music sheets he is publishing for the first time in a certain format. For books and music sheets that are imported from abroad, the importer sets the fixed price.

Every 6 months the price can be adapted. Books can only be sold under this price if certain conditions are met (such as damage to the books and if the books have been longer than a certain time in the inventory but haven't been bought for another certain time from the publisher).

HarryT · 12-16-2009, 09:34 AM

We used to have such a law in the UK, called the "net book agreement", but it was judged in the courts to be "anticompetitive" many years ago, and abolished.

Andanzas · 12-16-2009, 03:27 PM

Yay! Spain finally made the headlines in something related to ebooks! I am so proud of my country.

By the way, does anyone know if the law that fixes book prices also applies to ebooks?

Terisa de morgan · 12-16-2009, 04:15 PM

Quote:

Originally Posted by Andanzas

Yay! Spain finally made the headlines in something related to ebooks! I am so proud of my country.

By the way, does anyone know if the law that fixes book prices also applies to ebooks?

No, I don't know, but don't worry, if it doesn't apply know, it will apply soon

raulf · 12-17-2009, 07:07 AM

A case in Point:

The spanish e-retailer leer-e has a book collection called Palabras Mayores. The price of these books, including VAT, when the VAT was 16% was €5 each. Today, they already charge the new 4% VAT (you can see for yourself adding one to the shopping cart), so the new final price of the books is ... you guessed it, €5.

Now, €5 is a really low price, so this isn't the worst case of "greedy" booksellers, and i can understand them doing that, nevertheless is a typical case of "new VAT, old price".

Sweetpea · 12-17-2009, 07:28 AM

Quote:

Originally Posted by Andanzas

Yay! Spain finally made the headlines in something related to ebooks! I am so proud of my country.

By the way, does anyone know if the law that fixes book prices also applies to ebooks?

Here, it doesn't. But not that you'd notice, they are the same price or more expensive than pbooks. Even though they are officially allowed to play with the price...

LARdT · 12-17-2009, 09:05 AM

Quote:

Originally Posted by raulf

A case in Point:

The spanish e-retailer leer-e has a book collection called Palabras Mayores. The price of these books, including VAT, when the VAT was 16% was €5 each. Today, they already charge the new 4% VAT (you can see for yourself adding one to the shopping cart), so the new final price of the books is ... you guessed it, €5.

Now, €5 is a really low price, so this isn't the worst case of "greedy" booksellers, and i can understand them doing that, nevertheless is a typical case of "new VAT, old price".

An example of inelasticity of price in relation to a VAT decrease

HarryT · 12-17-2009, 09:07 AM

Quote:

Originally Posted by raulf

A case in Point:

The spanish e-retailer leer-e has a book collection called Palabras Mayores. The price of these books, including VAT, when the VAT was 16% was €5 each. Today, they already charge the new 4% VAT (you can see for yourself adding one to the shopping cart), so the new final price of the books is ... you guessed it, €5.

Now, €5 is a really low price, so this isn't the worst case of "greedy" booksellers, and i can understand them doing that, nevertheless is a typical case of "new VAT, old price".

I'd suggest contacting them, and asking why they've increased the price of their books.

eksor · 12-18-2009, 07:10 AM

Quote:

Originally Posted by Andanzas

Yay! Spain finally made the headlines in something related to ebooks! I am so proud of my country.

By the way, does anyone know if the law that fixes book prices also applies to ebooks?

No, the VAT remains at 16%, they are considered as electronic consumer goods

(o como se diga :-) )

regards

HarryT · 12-18-2009, 07:32 AM

Quote:

Originally Posted by eksor

No, the VAT remains at 16%, they are considered as electronic consumer goods

(o como se diga :-) )

regards

Sorry, I thought that the whole purpose of this thread was that the VAT rate on eBooks had been reduced to 4%?

We are talking about eBooks, not eBook Readers here.

Terisa de morgan · 12-18-2009, 07:37 AM

Quote:

Originally Posted by HarryT

Sorry, I thought that the whole purpose of this thread was that the VAT rate on eBooks had been reduced to 4%?

We are talking about eBooks, not eBook Readers here.

It's a typical Spanish mistake

Our newspapers call eBook to the book and the device

12-16-2009, 05:07 AM	#16
LARdT The LARdT of E-Books Posts: 106 Karma: 46 Join Date: Dec 2009 Device: HANLIN V3ext (Papyre 6.1)	Just a comment from Spain As a spaniard I comment the news on my blog http://mipapyreebookreader.blogspot....algo-util.html The facts: publishers asked for it because digital books make 8% volume for publishing industry, which is quite strong because of Hispanic America trade. The legal trick is made by applying the priviledged VAT rate of 4% for "cultural goods". The "digital book" is treated as "book" instead of beign treated as "digital". That makes a 12% discount difference from the universal rate of 16%. "Underground" commentators say that the ministry of culture, Gonzalez-Sinde, former movie director, has done this in order to be more popular with the websphere, which has been very active against her because her opposition to P2P, SGAE copyright protection taxes, and other non popular measures. She was called "SINDEscargas" (a joke with her family name meaning "No downloads")

12-16-2009, 05:31 AM	#18
LARdT The LARdT of E-Books Posts: 106 Karma: 46 Join Date: Dec 2009 Device: HANLIN V3ext (Papyre 6.1)	Publishers are happy Well, they count on the increase of sales derived from lower prices. Retailers usually sell books for prices imposed by the publisher. But you are right to point that prices are "completely elastic" to VAT in case of increase, but can be a little "inelastic" in case of decrease; meaning that usually 1% up VAT means at least 1% up in prices to the final consumer; and -1% VAT sometimes means 0% difference in final price.

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12-16-2009, 09:34 AM	#21
HarryT eBook Enthusiast Posts: 85,544 Karma: 93383043 Join Date: Nov 2006 Location: UK Device: Kindle Oasis 2, iPad Pro 10.5", iPhone 6	We used to have such a law in the UK, called the "net book agreement", but it was judged in the courts to be "anticompetitive" many years ago, and abolished.

12-16-2009, 03:27 PM	#22
Andanzas Out of print Posts: 484 Karma: 1549538 Join Date: Jun 2007 Location: Madrid, Spain Device: Sony PRS-500 (recycled), Pocketbook Inkpad X Pro	Yay! Spain finally made the headlines in something related to ebooks! I am so proud of my country. By the way, does anyone know if the law that fixes book prices also applies to ebooks?

12-17-2009, 07:07 AM	#24
raulf Member Posts: 10 Karma: 10 Join Date: Dec 2007 Device: Kindle 2	A case in Point: The spanish e-retailer leer-e has a book collection called Palabras Mayores. The price of these books, including VAT, when the VAT was 16% was €5 each. Today, they already charge the new 4% VAT (you can see for yourself adding one to the shopping cart), so the new final price of the books is ... you guessed it, €5. Now, €5 is a really low price, so this isn't the worst case of "greedy" booksellers, and i can understand them doing that, nevertheless is a typical case of "new VAT, old price".

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